A provision of the $2 trillion CARES Act economic relief package signed into law March 27 sets aside $250 billion for direct payments to individuals and families to help soften the blow of lost income and economic upheaval caused by COVID-19.
The IRS announced that checks, up to $1,200 per individual or $2,400 per married couple, plus $500-per-child payments for eligible households, may start going out as early as April 9, though some Americans won’t get theirs until September, a source of much criticism considering relief is badly needed now. Moreover, a significant portion of the populations of Brownsville, the Rio Grande Valley and Texas are unlikely to receive any financial assistance through the CARES Act — even residents who pay federal taxes.
U.S. residents with Social Security Numbers and an adjusted gross income up to $75,000 will receive the full $1,200, though individuals earning up to $99,000, or $136,500 for head-of-household filers, will receive a lesser amount. Otherwise, individuals making more than $99,000 will not receive relief checks. Married couples without children and with a combined income below $150,000 will receive $2,400, while couples making up to $198,000 in combined income will receive less.
However, residents who are not U.S. citizens and therefore ineligible for a SSN, but have an Individual Taxpayer Identification Number assigned by the IRS so that they can still pay federal taxes, will not receive relief checks. Further, according to the Congressional Research Service, in response to an inquiry from the office of U.S. Rep. Filemon Vela, households will not receive relief checks if one spouse on a jointly filed tax return uses an ITIN rather than a SSN. Such households are defined as “mixed status.” The exception is if one spouse served in the military in 2019.
ITINs don’t authorize a non-U.S. citizen to work in the United States, but they do allow the IRS to collect federal taxes from the unauthorized, non-U.S. citizen worker.
According to the National Immigration Law Center, if both spouses use an ITIN to file their taxes, no one in the household is eligible for relief, regardless of whether returns are filed jointly or separately. In cases of mixed-status households, though, it’s possible there will be some leeway.
“For mixed-immigration status married taxpayers … the couple would need to file separately in order to claim the rebate for any eligible household members,” NILC reported. “However, filing separately may render a person ineligible for Affordable Care Act (Obamacare) subsidies that may be larger than the Recovery Rebate. Taxpayers should consult professional tax preparers about the best options for their unique household situation.”
The Congressional Research Service said it is awaiting IRS confirmation of details on CARES Act exclusions for mixed-status families.
A recent study by the University of Southern California’s Center for the Study of Immigrant Integration and the Center for American Progress estimates conservatively that nearly 2.7 million Texas residents, or 10 percent of the state’s population, live in mixed-status households. The CARES Act exclusions for relief will have a significant impact in Texas, especially in Brownsville and the Rio Grande Valley with their large population of unauthorized residents, though the exact percentage that will be affected is unclear.
Vela said the House tried to get rid of the ITIN exclusions in the final CARES Act, though the Trump administration and Senate Republicans rejected the effort. Vela signed onto a letter from fellow Congressman J. Luis Correa (D-Calif.), who wrote that the exclusions are harmful to “immigrants who are among the most vulnerable during this outbreak” and announced to his congressional colleagues that he was introducing legislation to include ITIN filers in CARES Act relief.
Barring the ITIN exclusions, and based solely on per capita income, Brownsville would rank third in the nation among the 200 largest U.S. cities in terms of the percentage of its population that would receive financial relief via the CARES Act, according to an analysis by New York-based personal finance technology firm Smart Asset. The study estimated that 98.7 percent of Brownsville’s 51,334 households would receive a check through the relief package, with 95.2 percent receiving the full benefit.